KOCHI: The government’s efforts to tap the mining and geology sector to bring in an additional amount of Rs 600 crore under the non-tax category have pundits worried that the move may inflate the price of construction materials and induce a shortage of granite. This, they believe, will impact the entire construction sector.
Finance Minister KN Balagopal, in his budget speech on Friday, announced seven proposed changes in the mining sector. They include royalty revision across all segments of minor minerals, the introduction of a price differential system for granite, and the revision of penalties.
The government hopes that the move, designed to add Rs 600 crore to the state’s coffers, will also curb clandestine mining activities.
“It is important to note that the royalty in minor minerals (building stones, gravel sand etc.) has not been revised since 2015, though it can be revised every three years. Royalty revision, penalty, and scientific quantity measurement will enhance income collection. It is therefore proposed to revise them scientifically as per the market trends,” the minister said.
However, his proposals have drawn criticism from industry players. Saji K Elias, a leading businessman in the mining and geology sector, is of the view that though the department has the capacity to alleviate the state’s financial crunch, the lackadaisical attitude of the officials and corrupt practices that prevail in the sector are roadblocks.
“At present, a sum of Rs 24 is the royalty fee for a tonne of minor minerals. We are ready to pay the amount even if it is hiked to Rs 30 or 35 per tonne. However, officials take about six months to settle our application. Ideally, this should be done in a matter of 20-30 days. We should also be given the permit to start the work during the time the application is reviewed,” he said.
M K Babu, general secretary of the Small-scale quarry and crusher association, said the budget’s suggestions would directly hit the public as there would be a sharp increase in the price of construction materials and a shortage of building stones (granite). He also pointed out several issues with the royalty payment. “Private parties control many quarries functioning on government land in the Malabar region, and there are court orders in favour of their ownership. These issues should be addressed immediately,” added Babu.
According to the Kerala Minor Mineral Concession Rules, one must pay a royalty to the government for quarrying and moving minor minerals. The Budget’s other suggestions include combining the seigniorage and royalty to a single rate and royalty payment and royalty to be based on quantity.